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The President's Message


 The underlying rationale for the emergence of capital markets and the model of publicly-held ownership structure in the US was to enable individual investors, generally with limited capital, to pool their capital and participate in larger investment opportunities and in turn contribute to the national economy by way of bringing capital, that otherwise would not have been deployed, to fuel growth.

This model has worked successfully for many years and has been adopted globally.

However, over time this model's shortcomings have also been witnessed, the most important  one being the lack of a specific "owner" one can point to given the wide distribution of ownership interests.  This limitation over time, led executives of companies, without any or much skin in the game, to use the companies for their own personal benefits and eventually caused financial crises leaving these smaller individual investors with capital losses.

In this context, Garanti Investment Partnership, despite its small footprint, presents an ideal example of the publicly held corporation.  With a public float of 99.7%, it truly fulfills its aim to spread the ownership to the base.  On the other hand, the company is not without a clear owner.  Owing to the structure of shares with limited concession, which represent the small portion of ownership held by Garanti Bank, this issue has been eliminated through the management's meticulous administration and attentive oversight under the Bank's umbrella. 

As a result, in the last decade the Partnership generated earnings of approximately 14% per annum (vs. the 8% inflation rate in the comparable period) and distributed the earnings to its shareholders. 

it is also important to note that, while meeting its objectives described above, the Partnership has not experienced any conflict with any of its shareholders, stakeholders, employees, regulatory or supervisory authorities, governmental bodies and has not been subject to any sanctions, nor received any legal notices. 

The result of this harmonious partnership between Garanti Bank and Partnership's wide investor base has not only produced a profitable and reliable organization but also constituted a role model in line with the overall aim of capital markets.

It is clear that the preservation of this model and its further adoptation by many similar organizations will prove valuable to our capital markets.